J.P. Morgan downgrades L-3 Communication

ChristopherHinton

NEW YORK (MarketWatch) -- J.P. Morgan downgraded L-3 Communication
LLL, +0.34%
to neutral from overweight on Thursday as military contractors across the board begin to see a decline in government spending. "This weakness appears to be partially driven by slow contract execution due to the change of administration, but we also believe it is the beginning of the broader slowdown, hastened in part by program cancellations," the firm said in a note. Shares among military contractors have underperformed the Standard & Poor's 500 Index because the recession, rising federal debt and a winding down of America's adventure in Iraq is expected to cause a rollback in Pentagon spending. Shares of L-3 closed Wednesday at $80.23.

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